Hamas:
Using Charitable Societies to Fund and Support Terror

(Updated September 2003)

In Hamas's worldview, dawa ("preaching" or "calling") plays
an important role in the organization's activities and is one of the
more prominent means by which it realizes its immediate goals: inculcating Islam among the public,
increasing public support for the organization and recruiting new members.

Hamas's dawa is, in effect, the movement's infrastructure.
It includes a range of organizations that provide various services (welfare,
education, health, etc.) to the population, either for symbolic prices
or free of charge.

Charitable and social welfare activities are a significant
part of Hamas's dawa activities, since giving to charity is a fundamental
principle of Islam. These activities are carried out by network of dozens
of charitable societies and committees throughout Judea, Samaria and
Gaza. While these organizations provide services to the public at large,
they grant preference to those close to the movement and see to it that
those in its favor receive increased financial assistance.

Hamas's charitable societies and committees in Judea,
Samaria and Gaza also provide food and monetary assistance to the families
of those who have been killed and wounded in perpetrating acts of terror and who have been imprisoned for their involvement in acts of terror.
Such families typically receive an initial, one-time grant of between
$500-5,000, as well as a monthly allowance of approximately $100. The
families of Hamas terrorists usually receive larger payments than those
of non-Hamas terrorists. These charitable societies and committees also
provide the families with scholarships and educational subsidies. The
dawa groups also provide financial assistance for the rebuilding of
homes that have been demolished due to their owners' involvement in
terror.

The movement's network of mosques and Islamic preachers
serve as a platform for disseminating incitement against Israel, for
encouraging suicide terrorism,
and for recruiting terrorists.

Hamas's charitable societies and committees in Judea,
Samaria and Gaza also provide aid to Palestinians who have been injured
during the ongoing wave of Palestinian violence in confrontations with
Israeli security forces or during "work accidents." This includes
both initial grants and monthly allowances potentially worth hundreds
of dollars, depending on the status of the injured person.

Those injured as mentioned above also enjoy medical
care and treatment - either subsidized or free - provided by the organization.
Hamas also aids its members who are imprisoned either in Israel or the Palestinian Authority,
as well as the imprisoned members' families. Released prisoners receive
generous release grants.

Hamas's dawa network turns the perpetrating of terrorist
acts, including suicide terrorism, as a means that, in effect, provides
economic security and certainty in the severe economic situation that
the Palestinian population currently finds itself in, and thus encourages
the perpetrating of such acts of terrorism. Hamas exploits the distressed
economic situation by creating financial dependence and the continued
flow of new recruits out of a sense of obligation. Moreover, funds designated
for dawa have been diverted directly to terrorists in order to fund
attacks.

Hamas's wide-ranging activities among the Palestinian
population have led to its strengthening vis-a-vis the Palestinian Authority
and have prevented the PA from acting against it due to Hamas's support
among the wider Palestinian public. (Statements by senior PA officials
last month to the effect that they would monitor Hamas's bank accounts
have not been followed up by any action whatsoever.) Hamas is thus,
in effect, preparing itself as an alternative to the PA in the guise
of its educational, social and medical infrastructure.

Most of the funds for dawa activities are raised outside
Judea, Samaria and Gaza. These funds - $25-30 million per annum - form
the lion's share of Hamas's budget. Pro-Hamas Islamic charitable societies
in Saudi Arabia, the Persian
Gulf emirates and in the west transfer funds to Hamas's charitable societies
and committees in Judea, Samaria and Gaza. Among these pro-Hamas charitable
societies are "The World Congress for Islamic Youth" and the
"World Islamic Organization" from Saudi Arabia; "Interpal"
based in London (which transferred $6 million in 2002); and the recently
outlawed "Al Aqsa Fund" based in Germany.

Interpal - This fund has continued to transfer
money to Hamas in recent months. In 2002, it transferred $6 million,
of which between $3-$4 million were used in Judea Samaria and Gaza.
At the same time, the Interpal leadership secretly turned to Arafat
with a request for aid in funding its activities, as they are very concerned
about the possibility that they would be closed down and that they themselves
might suffer. The fund's leaders asked Arafat and the Palestinian Authority
to publicly support and sponsor its activities; something which they
believe would make it more difficult for their organization to be harmed.
It is yet unclear as to how the Palestinian Authority has responded
to this request, but despite declarations to the contrary, the Palestinian
Authority is not taking any concrete steps against Hamas operations.

The Al-Aqsa Fund - This fund is mainly active
in the Netherlands and Germany
and maintains smaller delegations, and holds bank accounts, in Denmark
and Belgium. The fund continues, albeit indirectly, to transfer hundreds
of thousands of dollars to Judea, Samaria and Gaza. In August 2002,
the fund was banned in Germany, which led to a significant increase
in its activities in Holland, where it raised approximately 600,000
Euros in 2002 and $650,000 in 2001. Presently, legal action is being
taken against the fund. In April-May 2003, preliminary steps were taken
to freeze approximately 200,000 Euros.

Thus, fund activists in the Netherlands continued
to raise money but under the guise of a seemingly new fund called ISRA,
in order to make it harder for its activities to be supervised. The
Al-Aqsa Fund has acted as a conduit for funds channeled to Judea, Samaria
and has cooperated with Interpal.

Lis Ben Khaled, 36, was arrested in Israel on May
1, 2003. Khaled, a French national of Algerian origin and an activist
for a pro-Palestinian charitable organization, arrived in Israel with
11,000 Euros and contact details for someone in Jenin. Khaled was questioned
by the Israel Police, to which he gave information regarding the activities
of his offices, their connections and money transfers. His organization
has since been outlawed in the U.S. due to its involvement in terrorist
activities.